1. Gossman Corporation is analyzing a capital expediture thatwill involve a cash outlay of $524,520. Estimated cash flows areexpected to be $180,000 annually for four years. The present valuefactors for an annuity of $1 for 4 years at interest of 10%, 12%,14%, and 15% are 3.170, 3.037, 2.914, and 2.855, respectively. The internal rate of return for this investment is:
a. 10%
b. 12%
c. 14%
d. 15%
2. Morino Corporation sells product W for $125 per unit, thevariable cost per unit is $90, the fixed costs are $450,000, andMorino is in the 30% corporate tax bracket. What are the sales(dollars) required to earn a net income (after tax) of$25,000?
a. $1,249,020
b. $674,625
c. $1,734,693
d. $1,904,750